What is Policy Quality Score?
An insurance policy grader scores your policy across coverage breadth, exclusions, deductible levels, claims process, and value for money.
The Formula
Score = (Points Earned ÷ Maximum Points) × 100
Worked Example
A business policy: coverage 7/10, exclusions 5/10, deductible 6/10, claims 7/10, value 8/10.
- Total = 7 + 5 + 6 + 7 + 8 = 33
- Maximum = 50
- Score = (33 ÷ 50) × 100 = 66%
📌 Policy scores 66%, good value but exclusions and deductible levels create coverage gaps in critical areas.
Why This Matters
Claims success
Well-structured policies pay 90%+ of claims in full. Poor policies have exclusions that deny 20-30% of claims.
Cost optimization
Higher deductibles reduce premiums by 10-20% but increase your risk. The right balance depends on cash reserves.
Regulatory compliance
Some industries require specific coverage. A graded policy reveals compliance gaps before regulators find them.
Common Mistakes
❌ Choosing on price alone
The cheapest policy has the most exclusions. A $200 saving on premium can mean $50,000 less in claims coverage.
❌ Not reading exclusions
Exclusions are where policies differ most. Common exclusions for wear and tear, gradual damage, and pre-existing conditions catch many claimants.
❌ Auto-renewing without review
Policies change terms at renewal. Review every year to ensure coverage still matches your needs.
Industry Benchmarks
| Category | Good | Average | Poor |
|---|---|---|---|
| Coverage Score | 85%+ | 65-85% | Below 60% |
| Deductible Level | Under $500 | $500-1,000 | Above $2,500 |
| Claims Satisfaction | 85%+ | 70-85% | Below 65% |
Source: J.D. Power Insurance Satisfaction Study 2025
Benchmark data sourced from J.D. Power Insurance Satisfaction Study 2025.